|Quoting PVD757 (Reply 42):|
take a look at the fare premiums DL gets on it's CVG routes. Reducing seat capacity by using the RJs will help limit the amount of super discounted fare inventory and outright empty seats in/out of the CVG hub.
If you recall, DL
introduced Simplifares first at CVG
, because much of the CVG
O&D were driving to nearby airports like DAY, LEX, IND, CMH and SDF. This was because DL
was charging a premium. Now that Simplifares is in place, O&D has picked up significantly at CVG
. If you reduce the discounted airfare at the CVG
market, the O&D traffic will just revert back to the nearby airports. Also, if you look at people connecting through CVG
, the fare structures a fairly comparable to other routes through a hub on a legacy carrier. So by removing the inventory, you will decrease revenue.
I don't think your CO
example at CLE
is an apples to apples comparison, as CLE
does not have the same market dynamics. CLE
has LCCs, namely WN
, where as CVG
does not. So that keeps the fares down on routes where CO
competes with WN
. Further, the only other airport in close proximity to CLE
as CAK, so while they have some O&D leakage, it is no where near the degree that CVG
was experiencing pre Simplifares.
Further, you talk about empty seats at CVG
. Where is your substantiation? I fly in and out of CVG
regularly, and I would have to say loads look pretty high on DL
. When non-revving, there have been times when I can't event get on a flight. The only flights that I have seen that may be a little light are on OH
, like the hourly runs between CVG
, or like you say, SCE
. This is where I will agree with you that frequencies need to be adjusted and some of these small cities eliminated. But I just cannot agree to your assessment that everything, with the exception of a few destinations, at CVG
should be on the RJ
Let's consider another point, Independence air is attempting a similar model, using RJs to most destinations, and bringing in some 320s and 319s for longer or higher demand markets. Yet, even with low fares, their loads in the the 40s....terrible. This would point to the conclusion that the RJ
is just not a viable plane to build a solid route structure and should be left for what it was meant to be, a feeder from thin markets.
But lets face the facts, we can sit here and be armchair CEOs all you want. I highly doubt that your or my opinion would make a difference to DL
and their immediate problems. DL
has real trouble as a result of their debt and lack of liquidity. By the time they instituted anything that resembles what you suggest and realize any benefit, if any, it will be too late. Given the amount of debt they have, it appears that cost cutting will not generate enough cash to even service their debt. While selling OH
and ASA would give them a much needed injection, the market cap for those entities is not that high, thus much more needs to be done to deal with the debt problem.
I wish DL
and its employees the best of luck. I have given them about all my business over the past decade, averaging 100k miles a year, and know they are good people. Too bad they had such poor leadership with Ron and Leo.